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"Lady, if I were you, I would run,
not walk, away from this house."
That's an actual quote, recounted by a friend over lunch -
the final bit
of advice offered by her home inspector after he had spent
several hours
pointing out the numerous serious deficiencies of a house she
had
fallen in love with.
While I'd not read the inspection report, I could guess the
reasons
for the inspector's opinion.
The house was more than a hundred years old, there had been
little updating since, and what
improvements had been made were of dubious quality. There was
significant foundation settlement
and there was no way of knowing at the time of inspection if
this was continuing. The inspector knew
his client was a single woman with little knowledge of
construction, and if he had guessed that she
would be mortgaged to the hilt, had put every dime at hand
into the down payment, and had limited
financial resources to deal with unforeseen expenses he would
have been correct.
If I had conducted the same inspection for a similar client last
week, the same warning would have
been running through my head.
Her inspection, though, was 25 years ago, and my friend bought
the house and has lived there
since - she has never regretted her purchase, and
as her income increased she gradually
caught up on the deferred maintenance and improved and
updated the hosue.
Over time the neighborhood become one of the hottest in Chicago
and the house has increased in
value to the point where if she wished she could sell it, move to
a lower cost area of the country,
buy a house, and live in part off the remainder of the sales
proceeds.
And as my friend reached the end of the story of her inspection
and purchase, she leaned
across the table and confided in a lowered voice - as though she
was announcing a heresy -
"I am so glad I didn't take that inspectors
advice."
I often tell this story as a cautionary tale, and I've given
a good deal of thought to why this
inspector's advice - which reflected a sound
technical basis for his concerns - was so
"wrong"
for his client.
And after listening to many accounts of clients who appear to be
acting against their own
interests (as supposed by their inspector, anyway) I've
concluded that such misjudgments are
often the result of the inspector's failure to consider the
long list of things they may not know
about the client, as opposed to the immediate fact of what
they do know about the condition
of the property.
For example
- An inspector usually has no knowledge of the financial
details of a purchase or sale.
The inspector may be thinking "It's going to cost $5,000
- 10,000 or more just
to repair this water damage" while the buyer may be thinking
"The seller is willing to
carry the mortgage for three years in order to get this
sold."
- An inspector usually has no knowledge of a client's
financial resources.
The inspector may be the thinking "These kids look strapped
for cash", but Aunt Louise
may be telling them "Please. Take the money. You are going
to get it anyway, and if
you reallylove that house I'd much rather see you buy it and
fix it up and live there while
I'm still around to enjoy it."
- An inspector may not share the client's tastes, values or
priorities.
The inspector may be thinking "Oh man, everything in this
place is going to need updating",
while client may be thinking "This really reminds me of the
house I grew up in. I'm so glad
no one has torn it up trying to "modernize"
it".
- Every inspector has biases that result from their personal
experience and technical
background.
Take my case. I have 30 years experience rehabbing buildings
(including live-in projects),
and a marriage that has survived the experience. I'm pretty
hard to scare, and perhaps a
bit too ready to see potential rather than difficulty. On the
other hand an inspector who's
gone through a nasty divorce brought on in part by the financial
pressures of home
ownership may be too ready to see difficulty rather than
potential.
This does not mean that an inspectors should not have opinions
based on experience - our
experience is part of what clients are paying us for - but it
does mean that inspectors
should be aware of such biases, and should state them to the
client whenever they are
likely to influence
an opinion.
On the surface what runs through the
"misunderstandings" above is the inspector's
conviction
that they know what is best for the client
But the deeper problem is that the decision to purchase - on not
- is not the inspector's decision
to make for the client, for the very ractical reason that
inspectors can seldom be certain they
know client and the client's situatio nwell enough to do
so.
So, what should an inspector do when a client looking at a house
with significant defect asks
"Would you tell your sister to buy this house"?
In my opinion, an inspector's goal should be that
whatever the clients decision, when the client
leans across the table to a friend afterwards it will be to say
"I am so glad I listened to that
inspector" (notice that is not "took
thatinspector's advice"), because their inspector
has
thought through how to present his or her opinion so as to best
assist their client to make
their own decisions without assuming that the inspector
knows what is best for the client.
For example here's my response at a recent inspection of a
building - a foreclosure sale of a
two flat under contract to young, first-time homeowners - that
from the buyer's perspective
clearly had some strong positives (an exterior with some
character in a style they liked,
large apartments and good location), but from a technical
perspective also had some very
significant problems.
"I've been rehabbing properties for over 30 years, and
I'm willing to take on pretty much any
project that makes economic sense to me - I've rehabbed
buildings where at some point in the
project all that was standing was one wall and the roof.
"With that in mind, looking at this building from a
technical standpoint, what runs through my
mind is "this is going to be a real handful as a first
investment". There is at least $50,000 to
$60,000 in work that needs to be done immediately to prevent
further water damage,
it will be very difficult to get a roofer and masonry contractor
out here before winter,
and we don't know what other hidden damage water may have
caused. Also, the boiler and the
hot water heater are both near the end of their service life. And
that's in addition to the costs
of the work you have mentioned that you want to do to the
apartment you will be occupying,
some of which will have to be done while you are living
there.
"Now, with the right resources this can all work out fine.
But I don't know your personal
and financial circumstances; and I can't make this decision
for you.
"I'll give you the most accurate information I can about
the condition of this property.
Then, my advice is to budget carefully for the likely costs of
owning this building in the next
year or two - the report will recommended getting quotes for the
roof and to rebuild the
chimneys and parapets and to replace the boiler and water heater
- and to think about how
you will feel about living in "the rehab-zone", and
about the stresses of being a first-time landlord
under those circumstances.
"Talk it over with your friends and your family, with your
lawyer, the contractors who give
you quotes for the work, and anyone else whose advice you value,
and especially with anyone
you know who's done something like this themselves.
"Then, make the decision that feels right to you
."
I think this is the right approach for a number of reasons, but
most of all because I'm not presuming
that I know my clients better than they know themselves.
________________________________________________________________________________________________
This article was written for Paragon Home Inspection LLC by
Michael Thomas. I am always interested
in readers comments on all aspects of property inspection. If
you have questions or comments about
this article please feel free to contact me by e-mail or at 847-475-5668.
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